Jul 17, 2026
The brand-new 21st Century Road to Housing Act is being hailed as a high-speed highway to affordable housing, a federal fast track to greater housing supply.
The overwhelming majority of Democrat and Republican lawmakers who voted for it contend that soaring housing costs are the direct result of a supply crunch.
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But not everyone is convinced that improving housing supply alone is the answer.
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Here’s a look at how the new law is designed to boost housing supply as well as other challenges that need to be overcome to make housing more affordable for renters and would-be homebuyers alike.
‘Stopping Wall Street from competing with Main Street’ solution
Housing advocates and politicians argue that mega-investors like Blackstone are shutting out would-be homeowners, snapping up residential homes and converting them into rentals.
They say renters are paying the price for these properties, as investors charge high rents and cut corners on maintenance in the name of profit.
President Donald Trump himself pushed for a ban on institutional investors who buy up single-family homes with an executive order in January entitled ‘Stopping Wall Street from competing with Main Street’.
“Hardworking young families cannot effectively compete for starter homes with Wall Street firms and their vast resources,” he wrote, adding, “People live in homes, not corporations.”
With his administration’s support, the 21st Century Road to Housing Act includes a ban on investors who already own at least 350 single-family homes from buying more.
In theory, the ban would improve the supply of single-family homes by taking such investors out of the equation, thereby making it easier to buy a home at a reasonable price.
In reality, Tobias Peter, co-director of the Housing Center at the American Enterprise Institute, warns that it might actually have a detrimental effect on renters by limiting the rental stock.
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“It’s probably a wash,” he told Politico.
And it’s not like institutional investors have taken over the residential housing market. While they own a relatively significant share (4%) of the single-family housing stock in Atlanta, Jacksonville and Charlotte, they only own 0.6% nationwide.
What’s more, many mega-investors are starting to divest from the market. According to Parcl Labs, institutional investors were starting to sell single-family homes long before the new housing bill was enacted — even before Trump issued his executive order.
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The ‘If you build it, prices will come down’ solution
Dennis Shea, executive vice president of the Bipartisan Policy Center and chair of the J. Ronald Terwilliger Center for Housing Policy, notes that the new law is designed to improve supply by fast-tracking construction.
“There’s a recognition across the country that we’ve underbuilt housing since the Great Recession,” he told Moneywise.
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The housing law eliminates a long-standing rule that required mobile homes to be built on steel chassis so they can be moved if required. That’s expected to cut construction costs by up to $10,000.
It earmarks $200 million over seven years for an Innovation Fund that will reward communities for adopting pro-housing policies, like encouraging construction of accessory dwelling units (ADUs) like basement apartments, garden suites, and laneway houses.
It also sets aside $50 million in provisional grants to states and communities that fast-track housing based on designs out of a prereviewed government pattern book. Essentially, homebuilders would choose model homes from a government catalog and build them.
But he added that increasing housing supply takes time, and so will improving housing affordability. The Urban Institute says housing supply alone is not the answer, as new housing can be just as expensive as old housing.
The nonprofit research organization recommends a mix of solutions that local, state and federal governments can adopt to make housing more affordable for renters and would-be homeowners, including:
- Requiring that developers set aside affordable units for income-qualifying households in new builds, and encouraging them to do so with incentives like tax credits
- Building more social housing through public-private partnerships
- Investing more in Community Development Financial Institutions, nonprofit, mission-led organizations that fund multi-family, affordable housing
- Repurposing public land (e.g. former schools) for housing redevelopment
- Preserve and rehabilitate existing affordable housing
- Provide financial assistance to rehouse people experiencing homelessness
This all suggests that when it comes to affordable housing, the 21st Century Road to Housing Act is more on-ramp than a highway, but at least it’s headed in the right direction.
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Laura Boast is an Associate Editor with Moneywise.com and a lifelong content creator who has reached international audiences at Discovery, CBC, Blue Ant Media, Bond Brand Loyalty and more.
